Dear Startup Investor,
Buck Jordan here, writing to you from Croatia.
Just kidding… but not completely.
Today, I’ll talk about a trend that has been front of mind as the calendar turned from 2021 to 2022: remote work.
Let’s flashback to March 2020 – almost 2 years ago (jeez) – and remember the very first wave of lockdowns. Suddenly, we went from commuting to offices to commuting to couches. We went from meetings around conference tables to being squares on Zoom. We went from the 9-to-5 life to working at your own pace and time of day.
But, the most significant shift of all was not working from home, it was working remotely.
A few months into the COVID-19 pandemic, when it became clear to everyone that we wouldn’t be going back to the office anytime soon, people suddenly began giving remote work a shot.
More and more people picked up their laptop, packed their bags and moved to places where they’ve always wanted to live.
“Work from home” redefined the definition of home.
Almost overnight, team members would clock into work and Zoom from all over the world. What was unimaginable 2 years ago became a global reality at breakneck speed.
While I believe working from home will continue to be an option for many folks, I do think that, in the next 2 years, we will see people transition to a hybrid model, spending at least a few days per week in office. If you live in the same city as your office, it makes sense to get some real-life face time and get to know team members.
However, I still think working remotely is here to stay. I’m not alone in that belief; in fact, McKinsey recently reported on what it called a once-in-a-generation opportunity to reimagine the workplace.
The competition for talent is stiff, and remote work allows companies to hire the best talent without proximity factoring into the choice. It’s also a perk many of the most talented employees look for when considering a job opportunity. More importantly, some of the leading companies in the world, such as Google and Facebook, have created permanent options for employees to work remotely, putting pressure on other companies to offer something similar.
For example, at Wavemaker Labs, we have slowly expanded our team globally throughout the past 2 years. Now, a crucial part of our engineering team is based in the Philippines, where we now have industrial designers, mechanical engineers, graphic designers and accountants. Viewing remote work in a global sense has helped us grow and hire faster in a very competitive talent market, and this is just phase one of our global expansion.
Remote work is here to stay, and I’m spending time as an investor thinking about how I can capitalize on this new behavior and where to make bets in and around this trend.
Travel and Hospitality
The most straightforward places to invest in relation to remote work are travel and hospitality.
Making it easier for people to move around and find flexible places to work and stay are both huge areas of opportunity. AirBNB and WeWork are pre-pandemic startups that both capitalized on this trend but weren’t designed for this remote-work era, and that’s left huge opportunities for newer startups to chase.
For example, RemoteYear offers everything from 1-week retreats to 1-year, multi-destination journeys designed for workers to maximize their personal experiences while working remotely. Similarly, RemoteDream offers remote workers the option to instantly book workspaces all around the world. Another startup, Anyplace, allows you to book apartments specifically designed for remote working.
Even legacy companies have woken up to remote work. For example, United Airlines partnered with Peerspace to experiment with bundling flights with office space.
Travel and hospitality represent a huge investment opportunity and are the most logical place to directly capitalize on the rise and permanence of remote work.
As a result, I expect startups around the world to target this area in coming years.
Payroll and Benefits Tools
Finding space to sleep and work is only part of the equation. Another crop of startups are aiming to make it easier to travel and work remotely with peace of mind.
For example, SafetyWing offers health and medical insurance for short-term or more permanent remote-working trips. Another startup, wrkfrce, is a media company dedicated to creating content on how to effectively work remotely and share tips and tricks to better manage the challenge.
However, the biggest area of innovation in the last 2 years has been in payroll.
We have seen a couple startups dedicated to this problem explode in size, such as Remote.com and Deel, each of which has raised hundreds of millions of dollars and thousands of people on their platforms.
It turns out paying employees in multiple countries – dealing with different tax laws and different health systems – is extremely complicated in this new, remote world.
As we know, when it comes to angel investing, the bigger the problem, the bigger the opportunity. I’m extremely excited about innovation in this space for that reason.
We are still in the very early days when it comes to remote work, and many more companies are going to need payroll-and-benefits tools as they open the door to employees working remotely from around the world.
One of the biggest changes since early 2020 is the plethora of digital products in every facet of life.
From food delivery, to online payments, to videoconferencing software, the pandemic forced everyone to embrace virtual solutions as a matter of survival. When it comes to business, companies have had to rapidly adopt workflow tools to more effectively transition to remote models.
However, it is still very early days, and many companies are still trying to figure out how to best work from home, manage remote teams, hire new employees and ensure their success. This has opened a rich vein of opportunity for new startups focused on building workflow tools to make remote teams more efficient, productive and happier.
A few years ago, Google Docs was considered best-in-class for remote work. Now, don’t get me wrong, I am a power user of Google Docs. But Google Docs is not enough to build an effective remote-first company.
Instead, we’ve seen dozens, if not hundreds, of startups launched in the last 2 years offering new, bespoke remote-first tools for various industries, companies and needs. The list is almost endless and seemingly growing daily.
Reimagining the Workplace with Remote
The beauty of remote work’s rise is that it has so many knock-on effects that create investment opportunities.
While the three categories I listed above are major areas of opportunity, there are many more. For example, I came across a startup named Galileo recently that offers online primary-school education for families working remotely. I think this is super innovative and not something that would have ever been in demand pre-pandemic. Suddenly, it is extremely relevant.
Even if just 2-3% of workers are remote at any given time, that is millions of people in the United States and at least tens of millions more globally. This shift in working behavior is creating a tectonic shift in spending, as people reallocate their time and budgets in different directions.
Smells like opportunity to me.